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The devastation wrought from the implosion of two Bear Stearns hedge funds isn’t hurting just the funds’ wiped-out investors, but increasingly, is being felt across the spectrum of bond market participants.

Bear’s announcement Tuesday that more than $1.5 billion of investor capital was annihilated in two Bear mortgage-backed bond hedge funds was greeted with the realization that it was just the tip of the iceberg with respect to investor losses.

For example, investors in collateralized debt obligations, or bonds made from bonds, especially the middle- and lowest-rated pieces, are seeing prices drop 30 percent and more. Worse, ratings agencies are finally lowering their ratings on the paper and trading desks refuse to bid anywhere near the prices that investors had previously valued the bonds.

The problem is no longer just limited to hedge funds specializing in mortgage arbitrage, where many funds are forced to sell assets to meet a rising tide of margin calls, as first reported in The Post.

Last week, Goldman Sachs wrote down $1.5 billion worth of its CDO inventory, the first major Wall Street firm to do so. Merrill Lynch, the most prolific underwriter of CDOs as of late June, said in its earnings conference call Tuesday that it viewed its CDO and sub-prime positions as “limited, contained and appropriately marked.”

Yesterday, The Wall Street Journal said that executives from Credit Agricole’s Calyon investment banking division had discussed as early as May that the unit “had suffered from the crisis” in sub-prime mortgage securities.

This made sense to one hedge fund manager of a $3 billion mortgage bond portfolio.

“The hedge funds [owning lower-rated CDO] paper . . . are being killed, and will continue to suffer. But there are hundreds of insurance companies, bank portfolios and pension funds that own billions of dollars worth of this, and they are going to be happy to get 50 cents on the dollar for their paper,” he said.

But there will be at least some big paychecks on the Street this year, as several hedge funds have made a killing shorting sub-prime bonds and indexes.

MKP Capital Management, a New York-based mortgage arbitrage hedge fund with almost $5 billion under management, has three separate funds that sold sub-prime mortgage paper short. The MKP Opportunity fund is up 18.78 percent so far this year, and has gained another nearly 4 percent this month. Its Partners fund is up 11.50 percent net of fees, and has gained 2 more percent this month.

In contrast, the Hedge Fund Research mortgage arbitrage index is up 3.47 percent this year.